Change Management & BPM
IT & IT Security
Retained searches provide a risk sharing model whereby both recruiter and client “have skin in the game” as a retainer is secured from the client prior to launching a search. The recruiter exclusively represents the client to place top talent which means the recruiter is incented as there is no competition internally or externally. The recruiter bears the risk in that delivering the required talent is not optional and is a time intensive effort.
With contingent searches there is little commitment from either the recruiter to work a job order or the client to hire a candidate from the recruiter. The search is not exclusive. The recruiter assumes all the risk including potentially investing time on a search that is filled internally, externally by another agency, goes on hold, loses budget, or is closed for any reason. No fee is paid unless the client hires a candidate from the recruiter. To mitigate risk a contingent search firm typically works off of volume of job orders.
What is marketing control? This is a big advantage to retained search and means how the job is positioned in the market. A recruiter partners with the client to present the opportunity accurately and attractively to secure on target, passive candidates. Also, because the search is exclusive the client is assured uniformity and consistency of messaging and positioning. A client must trust and have confidence in the chosen recruiter to not sully the search. Additionally, the passive candidate is more likely to respond to a recruiter who calls with a “retained search” because it carries more prestige and informs the candidate the client is serious.
By the very nature of a recruiter taking on a retained search he or she is telling the client, “I am finding the talent you require.”
Because the recruiter’s risk is high, client commitment is low, and more jobs are taken to hedge risk the results are variable.
Contingent search, typically a percentage of the candidate’s first-year salary is paid after the candidate is placed and begins work. Retained search commands a higher percentage of a candidate’s first-year compensation and is divided into 3 payments: one-third to initiate the search, one-third after either a designated time period or benchmark, and one-third after placing the candidate.